Railway to Tibet in red, passengers stay away in H1

August 18, 2008

By Lucy Hornby
Reuters
August 16, 2008

BEIJING, Aug 16 (Reuters) -- A controversial railway to Lhasa is
still losing money with passenger traffic nearly disappearing from
April to June following violent demonstrations in the Tibetan
capital, railway officials said on Saturday.

The train line from Golmud to Lhasa, inaugurated on July 1, 2006,
will be extended to the monastery town of Shigatse and resource-rich
Nyingchi in the southeast within the next two or three years.

"Our experience with other lines holds true for this one too, that
the initial benefit is economic and social," said Bai Xiaochun, party
secretary of the Qinghai-Tibet Railway Co, who estimated the 30
billion yuan ($4.37 billion) line is losing 1.2 billion yuan a year.

China says the rail line will help bring economic development to
ethnically distinct Tibet.

Tibetan activists say it speeds the immigration of Han Chinese to
Lhasa and the plateau, and allows increased exploitation of Tibet's
significant mineral resources.

Between April and June, 327,000 fewer passengers travelled on the
Beijing-Qinghai line than they had in 2007, after Tibet was closed to
tourists following demonstrations against Chinese rule that turned
violent in March, said Wang Yongping, spokesman for the Ministry of
Railways. He did not give a figure for 2007.

Passenger traffic returned to the same level as 2007 just before the
Olympics, but plunged again once the Olympics began in August in
Beijing, said Wang Zhongyu, deputy general manager of the
Qinghai-Tibet Railway Co.

Cargo volume on the line increased by 28 percent in the first half of
this year, but inbound cargo still exceeds outbound by a factor of
seven to three, Wang said.

Most inbound cargo is building materials, including steel and cement,
while outbound cargo includes 300,000 tonnes of mineral water
marketed as "5100 Tibet Spring," beer and dairy products, the officials said.

That discrepancy could even out as more mines start up. Production
will begin in September at the Yulong mine and 10,000 tonne-per-year
copper refinery in Qamdo, southeastern Tibet, the largest proven
copper deposit in China, the Xinhua news agency said on Friday,
citing local planning official Yang Qianrang.

The mine, with a proven deposit of 6.5 million tonnes of copper in
ore form and prospective reserves of 10 million tonnes, will be the
second largest in Asia. It is expected to produce 2,000 tonnes of
refined copper this year, and expand to 30,000 tonnes by 2010 and
100,000 tonnes a year ultimately.

Railway spokesman Wang said no plan currently exists for the Shigatse
spur to be extended to the border town of Yadong and on to other
Himalayan nations.